COD-US Bank Part 7 – Circling the Wagons?

DuPage C0. (ECWd) –

Robert Breuder – COD President, COD Foundation Ex-Officio, US Bank Advisory Board member / Marsha Cruzan – COD Foundation Board member, Foundation Treasure, US Bank President Chicago – COD Foundation as a whole

Contract law-IRS Tax laws-Public relations nightmare?

Before diving into additional concerns with the COD – US Bank arrangement, let’s bring in the new players! 

Who hired a public relations/crisis management firm on behalf of COD?

• Respicio F. Vazquez (See engagement letter here) – Hired without board approval and now wants COD to authorize and pay for it! (Board Approval Document from Respicio) (COD Agenda Item 9B3 on page 10)
  
• Who is Respicio F. Vazquesz? – Point of contact for notices relating to COD/US Bank contract disputes (See page 13, item 29 of the COD/US Bank Contract)
• Guy Chipparoni, President & Ceo of Res Publica Group (PR Firm), US Bank Advisory Board member! (Res Republic Information)
• Jordan Matyas– Son-in-law of House Speaker Mike Madigan, (Senior Consultant for Res Publica Group!)

So now we have three separate people who are all connected to US Bank and all three are making, or going to make money off of COD and the failures of its Administration led by Robert Breuder.  Mix that all up with legislatures screaming about audits and then bring in the mix a PR firm in which the House Speaker’s Son-in-law is a Senior Consultant, and we can only wonder, is there a whole lot more to the problems at COD?  Are things really that bad or are there some wagons that need circled as it relates to the exclusive no bid US Bank/COD contract matters we have been exposing?

Part 7!

The COD/US Bank contract spells out some very specific language in section 4 as it relates to the Banks obligations and payments to COD. It appears no one is paying attention to the details! (See Section 4 of the COD/US Bank Contract)

• 4.1 “Bank shall pay to College to the attention of the Senior Vice President of Administration and Treasurer at 425 Fawell Boulevard, Glen Ellyn, IL 60137….”
• 4.3.1 Bank shall pay, within 90 days of the opening of the On-Site Branch, and annually thereafter, a payment of $2,500 to be used for a U.S. Bank named sponsorship opportunity, to be; mutually agreed upon by the Bank and College.
• 4.3.2 Bank shall pay, within 90 days of the opening of the On-Site Branch, and annually thereafter, a one-time payment of $2,500 to be used for a U.S. Bank named scholarship opportunity, to be mutually agreed upon by the Bank and College.
• 4.3.3 Upon reaching 3 ,000 active checking accounts opened at• the On-Site Branch, Bank shall make a royalty payment of $5,000 to College. Upon reaching 5,000 active checking accounts opened at the On-Site Branch, Bank shall make a royalty payment of $10,000 to College. Upon reaching 7,500 active checking accounts opened at the On-Site Branch, Bank shall make a royalty payment of $12,500 to College. Upon reaching 10,000 active checking accounts opened at the On-Site Branch, Bank shall make a royalty payment of $15,000 to College. Thereafter and for each additional increment of 2,500 active accounts opened at the On-Site Branch, Bank shall make a royalty payment based upon the total existing number of active accounts opened at the On-Site Branch multiplied by 1.6. 1

Who are these payments to be made to?
The College of DuPage!

Is ANYONE paying attention to what is going on with this contract?

Read page 2 of the communications from the Assistant to the Senior Vice President of Administration and Treasurer sent to Thomas Glaser, the Senior Vice of President Administration and Treasurer (Click here to read the e-mail exchange on this!)

“Can you help with what this check is for? No one here seems to know why it arrived and for what.”

What does Glaser do? You know, the Senior Vice President of Administration and Treasurer who is supposed to be the one US Bank checks are paid to? He forwards the email to US Bank for them to explain to him what it is for! A day later they tell the COD treasure what the payment is for. (Click here to read the e-mail exchange on this!)

First problem, why didn’t Glaser know a rent payment was past due and be on the lookout for it? Why has he yet to collect the past due rent which is 4 months’ worth? Once again, the team that bragged about their internal controls is exposed by their own e-mail communications! (Click here to read the e-mail exchange on this!)

That’s minor compared to this!

I asked COD for a “copy of all money received from any bank or Credit Union as part of a contractual obligation for banking or credit union services being provided on campus since 2009”

The only thing COD produced was a copy of payments that equate to rent payments, minus the first 4 months of the contract. I have to assume, since we know COD would never violate FOIA, the records provided are complete. (Click here for what they provided)

Paying particular attention to sections 4.3.1, 4.3.2, 4.3.3. (See Section 4 of the COD/US Bank Contract)

The first two are annual payment requirements to be paid to COD and used as a US Banked name sponsorship and scholarship opportunity that is mutually agreed upon by the bank and the college.

Those annual payment obligations by contract total $5,000.00 and have never been paid to COD!

We do find a US Bank Scholarship fund for $5,000.00 in March of 2013 to the COD Foundation however no sponsorship is noted, which was required in the contract, only scholarships. Also note that the Foundation IS NOT the College of DuPage! Is this supposed to represent the annual scholarship payments in the contract? (See board packet for payments highlighted pages 20 and 21)

We see in the July 2013 board packet another $5,000.00 US Bank COD Foundation payment for another scholarship fund. Is this to cover the $5,000.00 royalty obligation for signing up 3,000 new checking account customers? (See page 24 of board packet)

In August of 2013 we see another $10,000.00 US Bank COD Foundation payment for another scholarship fund. Is this $10,000.00 tied to the same $10,000.00 obligation if US Bank Signs up 5,000 new checking account customers as outlined in 4.3.3 of the contract? (See page 28& 29)

The next series of royalty payments, assuming targets were met by the bank, would be for $12,500.00, then $15,000.00 obligations. We do not find any corresponding payment for the $12,500.00 checking account target set but there are two payments totaling $15,000.00 paid to the Foundation.

One $5,000.00 payment in December of 2013 –(See Page 20 & 22)– Another $10,000.00 in December of 2014 –(See page 27).

Was the $12,500.00 payment obligation overlooked?

So where am I going with this?

It is clear, COD has not been paid their portion of mandatory items for items 4.3.1 and 4.3.2 as outlined in the contract. Thus, US Bank not only owes for 4 months’ rent never paid, they also owe $15,000.00 to the College of DuPage to be used as sponsorships and scholarships.

How do we come up with $15,000.00 owed?  Note the two $2,500.00 payments outlined in 4.3.1 and 4.3.2 are “annual” payment obligations which total $5,000.00 for the 2013 opening payment, another $5,000.00 for 2014, and now that it is March of 2015, there should be another $5,000.00 payment making a total of $15,000.00 that has yet to be paid to COD under this contract.

I suspect we are going to hear from COD and based on what we are hearing from several people, they are going to claim the payments US Bank made to the Foundation were those payments outlined in section 4.3.1, 4.3.2, and 4.3.3.

MAJOR PROBLEM WITH THAT POSITION!

COD Foundation is not who US Bank has a contract with for starters. More importantly, the Foundation is a nonprofit 501c3 organization which raises some questions that I am sure some fine accountants could answer.

• Are there tax advantages to US Bank to make those payments to a Public Charity instead of the College?
• Is this part of the Breuder plan so that he could build up the Foundation and then brag about his accomplishment?
• Is not paying the college a contract violation?

The contract obligates US Bank to pay the College of DuPage, not the COD Foundation.

Since COD has not been paid anything other than rent on this contract, it appears to be pretty clear we have a breach of contract.

Breuder Bragging Points

• Strengthened the College of DuPage Foundation with the addition of new leadership and staff, with total assets listed as $14.4 million for FY 2014.
• More than doubled the number of scholarships awarded by the COD Foundation from 300 in 2009 to more than 600 in 2014.
• The Foundation raised $11.2 million in private support and public grants during FY14, representing the largest amount raised in the history of College of DuPage. (Click here for Brueder bragging points)

So was the US Bank contract obligations a smoke and mirrors operation used to help build up the Foundation financial numbers?

Once again, lack of over-site from the team that bragged on themselves is exposed! A simple contract with payment obligations to the College and no one is paying attention, from the first rent check received late to what is now thousands of dollars of debt owed COD!

All indications are this falls directly on the shoulders of their financial king pin, Thomas Glaser and the King himself, Robert Breuder!

All of the above information is based on the assumption that COD has complied with the FOIA law and provided all the records requested.  If they produce something after this publication then those responsible should be charged criminally for concealing public records!